NEW YORK, N.Y. – Oct. 18, 2018 – Medidata (NASDAQ: MDSO) today announced its financial results for the third quarter of 2018.
“Our strong financial and operational performance this quarter highlight the momentum and success we are seeing in the market,” said Tarek Sherif, chairman and chief executive officer, Medidata. “Positive trends in the life sciences market around innovation and operational efficiency are driving demand for Medidata’s cloud-based solutions. Our impressive and rising win rate and healthy backlog underscore the strength of Rave, as life sciences companies and CROs adopt the Medidata Cloud to drive their digital transformations.”
Third Quarter 2018 Results
- Total revenue was $163.4 million, an increase of 18% compared with $138.9 million in the third quarter of 2017
- Subscription revenue was $137.0 million, an increase of 17% compared with the same period last year. Professional services revenue was $26.4 million, an increase of 22% compared with the third quarter of 2017
- GAAP operating income was $14.1 million and non-GAAP operating income1 was $41.4 million, representing a GAAP and non-GAAP operating margin of 8.6% and 25.3%, respectively. Both numbers reflect a full quarter of expenses related to the acquisition and operations of SHYFT, which was acquired on June 20, 2018
- GAAP net income was $10.7 million, or $0.17 per diluted share, compared with $13.0 million, or $0.22 per diluted share, in the third quarter of 2017. Non-GAAP net income1 was $26.2 million, or $0.42 per diluted share, compared with $20.4 million, or $0.34 per diluted share, in the third quarter of 2017. See the non-GAAP reconciliation included in this release for full details of the non-GAAP adjustments
- Total cash and marketable securities were $218.5 million at the end of the quarter, compared with $663.3 million on December 31, 2017
- Principal amount of $287.5 million convertible notes was repaid with cash on August 1, 2018
- Remaining 2018 adjusted subscription backlog2 as of September 30, 2018 was $139 million, an increase of $22 million, or 19%, compared with a year ago
Additional Highlights:
- Penetration into APAC markets continues to grow, highlighted by a platform agreement with the largest pharmaceutical company in China and expansion deals with two of the largest sponsors in Korea
- A record 24 Rave Patient Cloud deals were closed this quarter, reaffirming the growing prominence of mHealth solutions, as well as the unique value proposition of our ePRO solution and its integration with Rave EDC
- The National Cancer Institute expanded its agreement with Medidata, allowing it to double its number of studies to 700 per year over the next five years, as it continues to scale our nation’s support infrastructure for cancer research
- Medidata’s revenue retention rate3 was nearly 100%
“The third quarter highlights the strength and durability of our business,” said Rouven Bergmann, chief financial officer, Medidata. “We posted solid revenue growth, highlighted by subscription revenue growth of 17%, and maintained a very healthy 25.3% EBITDAO margin despite the dilutive impact of the SHYFT acquisition. We are well positioned to achieve our 2018 plan.”
For the full year 2018, the company's guidance provided on June 12, 2018 is unchanged. Please refer to the reconciliation of forward-looking guidance included in this release for full details of the non-GAAP adjustments.
Conference call details:
Time: Today, October 18, 8 a.m. ET
Conference ID: 5480999
Live dial-in: 1-877-303-2528, domestic / 1-847-829-0023, international
Webcast: investor.mdsol.com
Replay: 1-800-585-8367, domestic
1-404-537-3406, international
About Medidata
Medidata is leading the digital transformation of life sciences, with the world's most used platform for clinical development, commercial, and real-world data. Powered by artificial intelligence and delivered by the #1 ranked industry experts, the Intelligent Platform for Life Sciences helps pharmaceutical, biotech, medical device companies, and academic researchers accelerate value, minimize risk and optimize outcomes. Medidata serves more than 1,000 customers and partners worldwide and empowers more than 100,000 certified users everyday to create hope for millions of patients. Discover the future of life sciences: www.mdsol.com
Cautionary Statement
Certain statements made in this press release are “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995 that involve significant risks and uncertainties about Medidata Solutions, Inc. (“Medidata”), including, but not limited to, statements about Medidata’s forecast of financial performance, products and services, business model, strategy and growth opportunities, and competitive position. Such statements are subject to risks and uncertainties that could cause actual performance or results to differ materially from those expressed in these statements. Among other things, the risks and uncertainties include those associated with possible fluctuations in our financial and operating results; integration activities, performance and financial impact of acquired companies; our ability to retain and expand our customer base or increase new business from those customers; and our ability to continue to release, and gain customer acceptance of, new and improved versions of our products. For additional disclosure regarding these and other risks faced by Medidata, see disclosures contained in Medidata’s public filings with the Securities and Exchange Commission, including the “Risk Factors” section of Medidata’s Annual Report on Form 10-K for the year ended December 31, 2017. You should consider these factors in evaluating the forward-looking statements included in this press release and not place undue reliance on such statements. The forward-looking statements are made as of the date hereof, and Medidata undertakes no obligation to update such statements as a result of new information, new developments or otherwise, except as required by law.
(1) Non-GAAP Financial Information
Medidata provides non-GAAP operating income, net income, and net income per share data as a supplement to its operating results. These measures are not in accordance with, or an alternative to, generally accepted accounting principles (GAAP), and may be different from non-GAAP measures used by other companies. Management uses these non-GAAP measures to evaluate its financial results, develop budgets, manage expenditures, and as an important factor in determining variable compensation. In addition, management believes, based on discussions with investors, that these non-GAAP measures enhance investors’ ability to assess Medidata’s historical and projected future financial performance. While management believes these non-GAAP financial measures provide useful supplemental information to investors, there are inherent limitations associated with the use of non-GAAP financial measures. Investors are encouraged to review the attached reconciliations of these non-GAAP financial measures to the nearest comparable GAAP measures.
(2) Adjusted subscription backlog equals subscription backlog plus outstanding intra-year renewals valued at an amount equal to the contracts to be renewed.
(3) Revenue retention rate is calculated as the percentage of prior year revenue attributable to customers retained in the current year.
Click here to download the press release, financial tables and non-GAAP reconciliation.
Investor Contact: Media Contact:
Betsy Frank Erik Snider
Medidata Solutions Medidata Solutions
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